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HomeMy WebLinkAboutResolution No. 4302, granting approval of Howie-Grisby Tax Abatement.pdf Commission Memorandum REPORT TO: Honorable Mayor Krauss and City Commission FROM: Courtney Kramer, Historic Preservation Officer Tim McHarg, Planning Director Chris Kukulski, City Manager SUBJECT: Resolution #4302 granting approval of the Howie/ Grigsby Tax Abatement Certificate of Appropriateness at 516 South Grand Avenue, a property within the Bon Ton Historic District on the National Register of Historic Places (#Z10260). MEETING DATE: December 13, 2010 AGENDA ITEM TYPE: Consent Agenda RECOMMENDATION: Approval of the requested Tax Abatement Certificate of Appropriateness for 516 South Grand Avenue through adoption of Resolution #4302 granting tax abatement for a period of twelve construction months and five years for the above referenced property. BACKGROUND: In 1989 the State of Montana established Chapter 424 of the laws of 1989 of the State of Montana, as codified by §15-24-1601 et seq. Montana Code Annotated (MCA), authorized the governing body of each city or county to confer the tax benefits described by §lS-24-1603 MCA to qualifying historic commercial or residential properties by resolution establishing the process for the use of the tax abatement provisions described therein. In October 2008 the City Commission adopted Ordinance 1744, Tax Abatement for Historic Preservation, which specified the procedure for application, project review, and recommendation by the BHPAB to the Commission and final approval by the City Commission through adoption of a Resolution. Ordinance 1744 also clarified the regulations a project must satisfy in order to remain eligible to utilize the tax abatement. Tax abatement holds the property’s taxable value at pre-project levels for up to five years. The abatement applies to local levies (high school, elementary school, city, county) and not state levies. For example, if the property owner paid $1,000 in local levies before the project and the project increased the value of the residence to the extent that the taxable value went from $1,000 to $2,000, the abatement would allow the property owner to continue to only pay $1,000 in local levies during a 12 month construction period and for five years after the project is completed. Thus the property owner saves $6,000 ($1,000 increase x six years of abatement) to offset the costs of the restoration project. 91 It should be noted in reference to the lofty standards for approval established in Ordinance 1744 that a grant of tax abatement is a discretionary act by the City Commission. Tax abatement is to reward extraordinary efforts in preservation and not minimal compliance with mandatory standards. Projects may meet the standards for a COA but not the advanced standards for Tax Abatement. Further, once the BHPAB has recommended approval of the Tax Abatement to the City Commission, the Historic Preservation Officer can approve the COA if the project meets BMC and Ordinance 1744 standards; approval of the tax abatement rests solely with the City Commission. In November of 2010 Christy Howie and Paul Grigsby submitted the documentation necessary to pursue tax abatement for their project at 516 South Grand Avenue, in the Bon Ton Historic District. The project proposes to construct a second floor addition to the rear of the residence, modify interior spaces, and replace non-original windows with more appropriate models. Expansion of the building’s footprint is not planned with this project. The BHPAB reviewed the application at their November 23, 2010 meeting, and voted 6-5 to recommend approval of the tax abatement. It should be noted that all of the dissenting votes were for procedural reasons; the BHPAB members felt this was an appropriate and deserving project, but were concerned with the specific language in the tax abatement ordinance as it relates to roof design. To that end the BHPAB will modify the ordinance in the spring of 2011. The project described in the application materials satisfies all the requirements of Bozeman Municipal Code and Ordinance 1744. The application for Tax Abatement is complete and the BHPAB has forwarded a recommendation of approval of the full tax abatement. UNRESOLVED ISSUES: none. ALTERNATIVES: The Certificate of Appropriateness has been approved by the Department of Planning and Community Development, as the project satisfied all requirements of BMC 18.28, as well as the Standards established in part 3.30.050 of Ordinance 1744. It is within the Commissions purview to approve, deny or modify the tax abatement, not the overall COA. Alternative 1: Modification of the extent of tax abatement to less than 100 % for a period of five years. Alternative 2: Modification of the length of tax abatement to 100% at less than five years. Alternative 3: Denial of the tax abatement. FISCAL EFFECTS: If granted, the tax abatement will affect the amount of increased taxable value for the city/county/school districts, for a period of up to five (5) years after construction. After the abatement period, the city/county/school districts will see the improvements added to the tax roll. For the property owner, approximately 80% of the property taxes on these improvements will be abated for five (5) years. 92 While significant to the property owner, the amount of tax revenue abated by this one project will not have significant financial implications for the City. Once the abatement period has ended, the City will benefit from the increase and improvement to our tax base. Attachments: CKramer’s Memo to Commission Resolution # 4302 granting tax abatement to the Howie/ Grigsby residence at 516 South Grand Avenue, within the Bon Ton Historic District. Property owner’s application materials BHPAB preliminary minutes for November 23, 2010 Ordinance 1744, Tax Abatement for Historic Preservation Montana Code Annotated 15-24-1603, Part 16 Report compiled on: December 1, 2010 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 1 of 2 COMMISSION RESOLUTION NO. 4302 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, ABATING ONE HUNDRED PERCENT OF THE INCREASE IN TAXES FOR A PERIOD OF TWELVE CONSTRUCTION MONTHS AND FIVE YEARS TO CHRISTY HOWIE AND PAUL GRIGSBY FOR THE PROPERTY AT 516 SOUTH GRAND AVENUE AS AUTHORIZED BY S15-24-1601 MONTANA ANNOTATED ET SEQ. FOR HISTORIC RESIDENTIAL AND COMMERICAL PROPERTIES UNDERGOING REHABILITATION, RESTORIATION, EXPANSION OR NEW CONSTRUCTION MEETING THE CRITERIA ESTABLISHED BY S15-24- 1605 AND/OR 15-26-1606, AS WELL AS CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RESOLUTION 2766. . WHEREAS, The City Commission determines that it is in the public’s interest to encourage the preservation, restoration, rehabilitation and reconstruction of certified historic, commercial and residential properties or new construction that meets design review criteria compatible with an historic district by conferring said tax benefits on improvements from those preservations, restorations, rehabilitations and reconstructions involving certified historic properties and districts; and, WHEREAS, the City of Bozeman received a request for tax abatement for historic preservation from Christy Howie and Paul Grigsby for the rehabilitation, restoration and expansion of the residence at 516 South Grand Avenue, Bozeman, Gallatin County, Montana, and; WHEREAS, the Montana Historical and Architectural Inventory indicates the property at 516 South Grand Avenue contributes to the Bon Ton Historic District on the National Register of Historic Places; and, WHEREAS, the restoration and expansion of the property received a Certificate of Appropriateness from the City of Bozeman’s Department of Planning and Community Development on November 28, 2010; and WHERAS, on November 23, 2010 the Bozeman Historic Preservation Advisory Board reviewed the application for tax abatement for historic preservation under 15-24-1601 Montana Code 113 Resolution No. 4302, Granting Tax Abatement for Historic Preservation to 516 South Grand Avenue 1 of 2 Annotated and City Commission of the City of Bozeman Resolution number 2766, as well as the Secretary of the Interior’s Standards for Historic Preservation and requirements for federal tax credits for historic preservation, and found that with conditions imposed, the nature of the preservation, restoration, rehabilitation and reconstruction and expansion to be in keeping with all ten of the Secretary of the Interior’s Standards for Historic Preservation, and voted to advise the City Commission approve the tax abatement requested with one specific condition; and NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, does hereby approve the tax benefits set forth in said statutes for those improvements made through preservation, restoration, rehabilitation and reconstruction of the property at 516 South Grand Avenue, a property which contributes to the Bon Ton Historic District on the National Register of Historic Places, for a period of twelve construction months and five years. PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 13th day of December, 2010. ______________________________________ JEFFREY K. KRAUSS Mayor ATTEST: _____________________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 114 Page 1 of 10 ORDINANCE NO 1744 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN MONTANA PROVIDING THAT THE BOZEMAN MUNICIPAL CODE BE AMENDED BY ADDING CHAPTER 30 IN TITLE 3 TO PROVIDE FOR STANDARDS FOR TAX CREDITS FOR HISTORIC PRESERVATION AND IMPLEMENTING THE TAX ABATEMENT AUTHORIZED BY SECTIONI5241601 MONTANA CODE ANNOTATED ET SEQ FOR HISTORIC RESIDENTIAL AND COMMERCIAL PROPERTIES UNDERGOING REHABILITATION RESTORATION EXPANSION OR NEW CONSTRUCTION MEETING THE CRITERIA ESTABLISHED BY SECTION 15 241605ANDOR SECTION 15241606 WHEREAS the built environment of a community provides a history of the community and is an indispensible component ofthe communitys sense ofplace and character and WHEREAS preservation restoration and rehabilitation of existing structures recognizes the embodied energy in them and reduces actions identified as negatively effecting climate change and WHEREAS the City ofBozeman has adopted a growth policy identifying historic preservation as an important community character and economic development policy and WHEREAS the City has conducted an inventory ofhistoric structures in the Neighborhood Conservation Overlay District which survey indicated that not all structures are of equal historic value and WHEREAS the City has already established a Certificate ofAppropriateness review procedure for structures in the Neighborhood Conservation Overlay District and WHEREAS Chapter 424 of the laws of 1989 ofthe State of Montana as codified by Sectionl5241601et seq Montana Code Annotated MCA authorized the governing body of each city or county to confer the tax benefits described by SectionlS241603MCA to qualifying historic commercial or residential properties by resolution establishing the process for the use of 1 115 Page 2 of 10 the tax abatement provisions described therein and WHEREAS the City Commission has determined that it is in the publicsinterest to encourage the rehabilitation restoration or expansion of certified historic commercial and residential properties or new construction that meets design review criteria compatible with an historic district by conferring said tax benefits on improvements from those restorations rehabilitations expansions or new constructions involving certified historic properties and districts NOW THEREFORE BE IT ORDAINED BY THE BOZEMAN CITY COMMISSION Section 1 That Chapter 330 Tax Abatement Certificate of Appropriateness be added to the Bozeman Municipal Code so that the Chapter shall read as follows 330010 Intent The intent and purpose ofthe Tax Abatement Certificate ofAppropriateness is to encourage the appropriate rehabilitation restoration and preservation ofhistoric properties which otherwise would not have been so carefully preserved It is recognized that a grant oftax abatement is a discretionary act by the City Commission Tax abatement is to reward extraordinary efforts in preservation and not minimal compliance with mandatory standards 330020 Authority Pursuant to Sectionl5241601through Sectionl5241608MCA the City Commission by this 2 116 Page 3 of 10 ordinance approves the tax benefits as set forth in said statutes for those improvements made by restoration rehabilitation or expansion of certified historic commercial or residential properties or qualifying new construction within an historic district which meets the design criteria during the construction period which is not to exceed twelve 12 months and five 5 years following completion of said construction in those situations where such improvements preserve certified historic commercial or residential properties or encourage appropriate new construction meeting the design criteria to be architecturally compatible within the historic districts A The tax abatement is limited to one hundred percent 100 of the increase in taxable value caused by the rehabilitation restoration expansion or new construction and applies to only those properties which do not receive any other tax exemption or special evaluation provided by Montana Law during the period of abatement 330030 Definitions A Construction period as used herein shall mean a period oftime from the date of issuance of the required building permit until the project is substantially completed or a period oftwelve 12 months from the date of issuance of said building permit whichever period is shorter B Qualifying new construction as used herein shall mean construction which satisfies the requirements ofSection 330OSOCBMC 330040 Procedures The owner ofthe property must comply with the provisions and standards ofSections 330040 3 117 Page 4 of 10 330050 and Chapter 1828 BMC in order to be considered for tax abatement Failure to demonstrate successful compliance with the requirements disqualifies a property from being awarded Tax Abatement but does not prohibit development with a Certificate of Appropriateness otherwise approved under Chapter 1828 BMC A The owner of the property is solely responsible for supplying to the Bozeman Historic Preservation Advisory Commission and the City Commission all information and documents necessary to evaluate the project If sufficient information and documentation is not supplied by the owner for consideration to make an informed decision the application will be denied B The Bozeman City Commission hereby designates the Bozeman Historic Preservation Advisory Board as its local review board and hereby directs said board to establish an application and review process to certify eligible properties as specified in Sectionl524 1604 Montana Code Annotated and which must include but is not limited to the design review criteria based on the Secretary of Interiors Standards for Rehabilitation of Historic Properties or other standards approved by the State Historic Preservation Office The established review process shall be integrated with the Certificate of Appropriateness review authorized in Chapter 1828 BMC C The local review board shall recommend approval or denial ofany application for the tax abatement and report its recommendation to the City Commission which shall then either approve or deny said recommendation by Resolution D All taxes assessments and SID obligations on any property proposed for tax abatement must be current before any tax abatement will be considered 4 118 Page 5 of 10 E Following certification and during the period oftax abatement if the property is altered in any way that adversely affects those elements that qualify it as historically contributing the property must be disqualified from receiving the tax abatement If the historic property which has received a tax abatement under this part is disqualified the owner is liable for back taxes interest and a penalty These costs must be extended against the property in the next general real property tax roll to be collected and distributed in the same manner as the currently assessed real property tax The back taxes interest and penalty must equal the sum ofthe following The difference in the total real property taxes due during the years the tax abatement was in effect and the total of real property taxes which would have been due had the special assessments not been in effect for those years 2 Interest on the amount calculated in subsection 330020A BMC at the rate for delinquent property taxes provided for in Sectionl516102MCA plus A penalty of 15 on the sum of subsection 330020A BMC Back taxes interest or penalty may not be imposed on a property transferred to an ownership that makes the property exempt from property taxation or if the property is destroyed by fire or force majure 330050 Standards To be approved as a Tax Abatement COA the following requirements shall be met A The property must meet one or more ofthe following criteria 1 The property is individually listed on the National Register ofHistoric Places NRHP 5 119 Page 6 of 10 2 The property is at least 50 years of age and located in an established NRHP historic district 3 The property is determined by a qualified professional to be eligible for individual listing in the NRHP If this criterion is selected the applicant must complete the necessary steps to list the property on the NRHP prior to the final approval of any abatement B Alterations to the properties or structures without City approval and consistent with the requirements of this Chapter nullifies the tax abatement qualification C All Standard COA requirements per 1828 BMC or its successors apply as well these further Tax Abatement COA Requirements 1 Additions to existing structures a Additions which increase the size ofthe footprint are limited to no more than a 10 percent increase ofthe structures footprint b Additions must not exceed the height ofthe existing roofline c Additions are limited to secondary facades and evaluated in the context of the fagade on which the addition is applied d Due to the limited size ofthe addition no specific similarity or differentiation of material is required as referenced in Secretary ofthe Interior Standards 9 10 2 Roof a Shape and material of the existing roof must be preserved unless it can be 6 120 Page 7 of 10 demonstrated that a different material is more historically appropriate for the structure b Dormers will be considered on a case by case basis and must meet the Secretary ofthe Interiors Standards and UDO standards for dormers Dormers shall be limited to not more than h the length of the existing roofline 1 If new dormers are added they must match existing historic dormers in shape style and materials 3 Materials a Windows Window matching is fundamental to the historic integrity ofthe building 1 Rehabilitation ofviable windows is required through repair restoration and reconstruction 2 Window replacement requires a professional assessment ofthe existing windows 3 Window replacement must be historically appropriate and match historic materials 4 If storm windows are applied they shall be historically appropriate b Siding 1 If historic siding is intact it shall be preserved and restored 7 121 Page 8 of 10 2 If historic siding is missing new siding should follow the Department of the Interiors guidelines for reconstruction c Foundation 1 Repair and stabilization of existing foundation materials is encouraged and a primary goal 2 Foundation replacement is allowed to the extent that the overall height increase ofthe house does not exceed eighteen inches 3 Foundation replacement requires a professional assessment of the existing foundation 4 If replaced the exterior of the new foundation shall match the historic foundation in appearance d Roof 1 Ifhistoric roofmaterial is intact it shall be preserved and restored 2 If historic roofmaterial is missing the new roofshould follow the Department of the Interiors guidelines for restoration 4 Accessory Building the same parameters apply to accessory buildings as for primary structures on the property Demolition of viable accessory buildings within five years of receiving the tax abatement nullifies tax benefits 8 122 F Page 9 of 10 Section 2 Repealer Commission Resolution 2766 and all other resolutions ordinances and sections of the Bozeman Municipal Code and parts thereof in conflict herewith are hereby repealed Section 3 Savings Provision This ordinance does not affect the rights and duties that matured penalties that were incurred or proceedings that were begun before the effective date of this ordinance Section 4 Severability If any portion of this ordinance or the application thereof to any person or circumstance is held invalid such invalidity shall not affect other provisions of this ordinance which may be given effect without the invalid provisions or application and to this end the provisions ofthis ordinance are declared to be severable Section 5 Effective Date This ordinance shall be in full force and effect on the 6th day of November 2008 PASSED AND ADOPTED by the City Commission of the City of Bozeman Montana at a regular session thereofheld on the 15th day of September 2008 b KAAREN JACO ON Mayor 9 123 Page 10 of 10 ATTEST STACY L EN City Clerk PASSED ADOPTED AND FINALLY APPROVED by the City Commission of the City ofBozeman Montana at a regular session thereofheld on the 6th day ofOctober 2008 KAAREN JACOBSON Mayor ATTEST ST CY LMEN City erk APPROVED ASTO FORM TIM COOPER Assistant City Attorney 10 124 125 126 127 128 129 130 131 132 133 134 Minutes for BHPAB meeting November 23, 2010 In attendance: Mark Hufstetler (Chair), Lora Dalton, Bruce Brown, Crystal Alegria, Dale Martin, Boone Nolte, Ryan Olson, Jane Klockman, Jared Infanger, Jecyn Bremer, Anne Sherwood (Secretary), Courtney Kramer (City Liaison). Quorum established. Guests: Christy Howie, tax abatement applicant I. Meeting was called to order at 6:40pm. II. Motion to approve the minutes was made. Minutes were approved by LD and seconded by BN. Minutes were approved unanimously. III. There was no public comment. IV. There was no ex parte communication. V. Introduction of Christy Howie, homeowner. VI. Project for Tax Abatement: Christy Howie’s home at 516 South Grand Avenue. - CK introduced the project. Suggested tax abatement to owners. Qualifies for COA. Does it qualify for tax abatement? - Christy Howie talked about the project. Trying to return the home to more original character. Not altering the footprint or the foundation. Leaving original windows. - LD asked about “going up.” Not visible from the street but addition will go up in the rear of the home. - MH asked about the awning windows. Are they conflicting with the tax abatement ordinance? MH asks if window replacement must be historically appropriate and match historic materials. - MH asked if replacement windows need to be wood exterior or can they be clad? - MH asked about the roof. Amount of addition creates a substantial alteration to the roofline? Board debated the language of the ordinance and the changes proposed. MH says we need to establish precedence with this admirable project. CK points out the ordinance is not a perfect document. MH countered we need to follow it regardless of its imperfection. CK added we could approve this and recommend that staff alter the ordinance. MH retorted that we need to honor it as it is currently written. - CH added that the ordinance is vague in a lot of areas. If you want to approve a project for tax abatement you should send the ordinance back for alterations. Construction schedule is that building permit application went in today. Would like to have project finished by end of July. - MH asked at what point in construction process does abatement come in? CK added usually in beginning but not much precedence. 135 - MH says this is a project that he likes but is concerned about conforming to the ordinance. - JK asked if we could amend the ordinance easily. CK says no. - MH says we have 3 choices: deny, approve or delay. - AS made a motion to a vote on whether the Howie project meets the criteria for the ordinance as we intend tax abatement to be used. - LD says thoughtful addition. In keeping with the house and neighborhood. Extends current shape and roofline and would recommend having the windows be wood but otherwise, approves of the project. - JK thinks it’s a very good project. Would wonder why new windows aren’t wood and comes within 95% of what we’ve outlined in the ordinance. - RO voices concerns about the literal interpretation of the ordinance and east elevation and change in roof shape. - JB said ordinance allows for difference in roof materials but not shape and addresses roof materials in two difference places. Should address that. Windows must be historically appropriate and matching historical materials. Asked CK if this was this case. Discussion regarding windows with confirmation that historic windows would not be altered. Also asked CK if this can be continued to deal with issues with the ordinance? CK says anything is possible except planning office is so busy that this won't get before commission until March at earliest. - DM is agnostic on the project and very leery of homage to original intent of flawed ordinances that we aren’t smart enough to meet or understand and we should have a living constitution. Why are we trying to put our square peg into the round hole? - JI shares concerns about roof shape. - BN shares concerns but hates holding homeowner to something that we created but is flawed. 136 - BB asked if commission votes or we? We make a recommendation to the commission and they vote on it. Asked why we vote on this now since projects evolve as they occur. Finds process awkward for number of reasons. Doesn’t think ordinance leaves a lot of wiggle room. Says literally shape of the roof can’t change even though he likes the project and thinks it adds to the neighborhood. Literally it goes against the ordinance. Said we should wait till the end of the project. Would vote against it if he has to vote now. Thinks that’s a mistake as he likes the project. - MH thinks it’s a nice project. Will be a handsome property when finished. But agrees with BB in that sees some of discussion as attempts to rationalize language in the ordinance. Apologizes for opening Pandora’s box. Can’t vote in favor of it but would recommend deferring it to set a point when we vote on it in the spring once project is well underway. Have subcommittee draft a letter to planning director offering replacement text for pages in the ordinance that need it. - CA feels it’s all well and good but doesn’t fit in with what the planning office can handle. CK says policy has been tax abatement must be applied for before building permit to prevent retroactive tax abatements but sincere that staff has been trying to get new ordinances since August and not going anywhere. - AS says she feels responsible as we wrote this ordinance in 2008. Feels the project is in the spirit of the ordinance. - For the motion: LD, JK, DM, BN, CA, AS - Opposed to the motion: RO, JB, BB, MH, JI - RO asks what’s the proper way for us to address this? MH is disappointed in the way we interpreted the ordinance. MH says need to recommend to make a formal recommendation to planning director to not grant tax abatement until occupancy permit is granted. - RO asks how we go about changing policy. CK says must be changed by commission. - RO makes a motion that our professional subcommittee address the tax abatement ordinance in the issues discussed tonight. BN seconds the motion. Unanimously approved. VII. Chair's Report – MH, Chair - DM asks structural information of the Brewery wall. Commission asked the same question. Staff: what will happen to neighborhood if wall is lost? Applicant: What will it cost to support the wall? - Subcommittees: Need to reinvigorate subcommittee attendance. Revisited assignments. Professional subcommittee is LD, BN, MH, PR, LG. JB. 137 - December meeting will be cancelled for a holiday party at BB’s instead. VIII. Policy and Planning Subcommittee - Bonding new construction is in the works. MH was approached by Commissioner Mehl that a majority of commissioners are in favor of a demo by neglect ordinance. CK says she was directed by her boss not to work on construction bonding and demo by neglect, as city manager does not believe there is support for it in the commission. LD thinks while Northeast neighborhood is hot, we should move forward with bonding issue. - Need to be photographing signs for sign ordinance. - Next meeting will be on 12/14/10 at 525 South Black at 6:30pm. IX. Education and Outreach - No meeting last month but successful cemetery tour. - Next meeting will be after the retreat. X. Staff Liaison: - Applying for Preserve America grant. Grant application drafts for structural analysis of East Willson School and Northern Pacific Passenger Depot. - Commission now requires information to be on the commission’s desk 10 days before the meetings. - Costs 40k/year to heat East Willson School. Roof leaks, water damage on foundation level. Great adaptive reuse possibilities. Value in tax credit comes if you can get the building for a reasonable amount, then the tax credits have more value. - COA numbers are high because of hail damage. - City has 150k save America’s Treasures grant. Only two applications are for Eagles East wall with its deteriorating brick. Ellen Theater wants to redo the marquee with a recreated 1919 marquee. Trying to steer them to use the money to restore interior plasterwork. Lawyer of property owner wants to use the money to stabilize brothel and Montgomery Ward building. MH suggested city hall archway should be installed in Optimist Park. - BHPAB retreat: 1/8/11. Time TBA. - Holiday party 12/19/10 at BB’s hopefully. XI. Meeting adjourned. 8:30pm. 138